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Banks are seeing a trend in some Canadian student profiles when it comes to debt. Their reports show one typical profile where a student starts
Banks are seeing a trend in some Canadian student profiles when it comes to debt. Their
reports show one typical profile where a student starts with their first credit card after age
along with a student tuition loan. The student maxes out on the credit card limit within a
short timeframe. The credit card company helps by increasing the limit The student then
applies for another credit card from another bank to transfer the original credit card balance
to a lower interest rate credit card, all while continuing to run up the debt on the original
credit card. The student then finds themselves in a difficult position where they can no longer
pay the amounts in full nor the minimum amount, so they seek to consolidate their debt
using a line of credit with lower interest rates to transfer the balance. This is somewhat of a
temporary relief, as the spending continues. In this scenario, this student profile has four
loans two credit cards, tuition loan, and a line of credit To regain financial control, what
are the best actions for this type of spending profile to take?
I Use a debit card or live on cash to ensure spending is within means
II To pay down debts, get a parttime job, a second parttime job or increase the work
hours if the current job is an hourly paid role
III Apply for another credit card
IV Request an increase in the credit card limit
V Prepare a budget to eliminate unnecessary costs and to limit spending to what is in
the budget
a II IV and V
b I, II and V
c II III, and IV
d I, III, and IV
e I, IV and V
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